Also the fact that the image is permanently retained after the document is deleted is completely unacceptable. It's obvious that they are trying to save money on bandwidth and CPU here, but it's not an acceptable place to cut corners.
As for #3, I think that it's pretty easy to guess what this vulnerability is. It's probably the following: When you get an invite to view a shared document, either 1) Accepting the invitation after the document has changed and permission redacted still gives you permission to see it 2) After your permission is revoked, you can use that URL to regain permission to the document.
I disagree with you on points #1 and #2. A lot of very important web apps are very insecure if crypto-strong nonce URLs aren't good enough. Clearly relying on URLs is suboptimal, but it's a long way down from "suboptimal" to "vulnerable".
Sure, crypto-strong nonce URLs are better than unobfuscated URLs, but that's just one protection.
For example, let's say that Google accidentally leaks a directory listing of all files on a particular google docs server (or let's say an access log, to be even more realistic). If Google had properly authenticated access to these images, then the leaked access log would be worthless and unexploitable. However, without authenticating these requests, Google has suddenly caused a mass security breach, as hundreds of people rush to wget all the URLs before the images are taken down.
If Google is seriously expecting people to use their product as a replacement for a business intranet, then they need to take seriously all concerns.
But the insecurity of desktop document suites doesn't give Google a free pass on having lax security standards.
Of course, this is my evaluation. You and your organization are welcome to use Google Docs if you are comfortable with their security practices.
I think the real issue is whether the systems operates as people expect it to. I would not have expected it to operate in the way described, and I suspect a lot of other people wouldn't either. There is a precedent here in tools like MS Office (ok, it isn't cloud based, but it is where some users are coming from as they adopt GDocs). If you told the average PowerPoint user that when they send a deck to their customer/partner that person will be able to see all the previous 'versions' of the document that you went through prior to giving it to them, then I think that PowerPoint user would be shocked, and worried.
I realize that cloud sharing and emailing aren't the same thing, and that GDoc's versioning system isn't the same as making changes and hitting save in PowerPoint from a technical point of view, but for the average user they probably feel like the same thing, so they will expect the same rules to apply. Bottom line: if it's going to operate like this then GDocs needs to make sure that users totally understand that.
If your application lets users restrict access to documents, it needs to restrict access to all parts of that document uniformly, regardless of how those parts are stored (embedded in the same file or spread out in multiple files).
1. Non-private uploaded images: This is the image URL http://docs.google.com/File?id=dczjts34_227g3234gdg_b. That looks like a pretty secure random UUID to me. You have as much chance of guessing that as guessing an account password. So the only problem here is revoking view access for someone to the document after they have viewed it. They can keep accessing the Document, if they have a copy of it. Which will always be true unless you want to start serving DRMed PDF files or something. I wouldn't put that past this particular security researcher.
2. User can view earlier revisions of a diagram: Fair enough. Once again, it doesn't seem like a complete breakdown of security if your collaborators can view earlier versions of a document or a diagram within a document. Personally, when I share a versioned document with someone, I expect they will be able access the versioning information. I don't know if Google makes any express guarantees about earlier versions being blocked off from viewers, maybe they should, but it's worth making it explicit.
3. Someone somewhere may be able to grant herself access to your documents: I am not even going to address this one. Without an actual account of the vulnerability, this is just irresponsible insinuation.